Microsoft Mulls a Midrange Server

by Alex Woodie

Microsoft has put together a package of software for midsize businesses with 25 to 500 PCs that's similar to the Windows Small Business Server package it offers to companies with 25 PCs or fewer. Unlike the bundle for small companies, however, the new midsize package doesn't yet rate a formal name, and is referred to by Microsoft as its "midsize business promotion." That will likely change if the new bundle is well received by the channel and the marketplace.

The new Windows Server midsize business promotion combines Windows Server 2003 Standard Edition, Exchange Server 2003 Standard Edition, and Microsoft Operations Manager (MOM) 2005 Workgroup Edition, along with 50 combination Client Access Licenses (CALs) for Windows Server 2003 and Exchange Server 2003. According to Microsoft, companies buying the bundle will save 20 percent off the retail price compared to purchasing these products separately. The bundle will cost about $6,400, and will be available through resellers and on new servers starting in August in the United States and Europe and in Asia starting in September. Companies will be able to purchase up to 200 additional CALs under the promotion, for a total of 250.

Microsoft announced the promotion last Thursday at its annual partner conference in Minneapolis. Microsoft will be relying on its 300,000 partners--the largest such network in the IT industry--to spread the word to the midsize business population. One partner, Peters & Associates, says Microsoft has the right stuff to tackle the midsize market. "The Windows Server System midsize business promotion is a great first step in delivering enterprise-class solutions to our midsize customers who are conscious of cash flow but have the most to gain from having a security-enhanced, well-managed infrastructure," says Richard Opal, a vice president with the Elmhurst, Illinois, company.

The promotion also fits nicely into Microsoft's increasingly industry-oriented strategy for selling software. According to Microsoft mid-market guru Steven VanRoekel, midsize businesses characterize themselves by the industry they are in, not by the technologies they use. "By marrying our small-business expertise with our enterprise products, Microsoft is showing midsize business customers that we understand their unique technology needs," VanRoekel said. "Microsoft has an uncompromising commitment to understand our customers by segment."

So what makes a midsize business when the companies view themselves as food manufacturers, trucking firms, law offices, and schools rather than midsize businesses? Microsoft has a couple of ways to measure it: those companies with between 25 and 500 PCs, and those with between 50 and 1,000 employees. In any case, Microsoft figures there are 1.2 million such companies, and that this segment's IT spending should grow 12 percent annually. Obviously, a good percentage of these organizations have already adopted computers, and Microsoft likely already has an established presence in these organizations. In this regard, the success of this new endeavor will hinge on Microsoft's ability to convince these midsize companies that they can run their IT systems more efficiently by upgrading to newer Windows technologies.

Microsoft has made several resources available to IT professionals and consultants who want to bone up on midsize business' needs. This includes a new Web site, www.microsoft.com/technet/midsizebusiness, where users can download papers and a new book, "Windows Server System Deployment Guide for Midsized Businesses," from Microsoft Press. The site also provides opportunities to send and receive feedback.

It is also promoting several new tools as ideal for midsize firms, including the Microsoft Security Assessment Tool (MSAT), which is designed to help customers with fewer than 1,000 employees assess security vulnerabilities; the Microsoft TCO Assessment Tool, which helps users examine IT spending over three years, and helps calculate ROI when upgrading to Windows Server 2003 and Exchange Server 2003; Microsoft Baseline Security Analyzer (MBSA) 2.0, another security tool for small and midsize businesses; and the Microsoft Software Inventory Analyzer, which helps companies track their Microsoft products.

The midsize promotion is brand spanking new--you won't even be able to buy it until next month--and Microsoft is already welcoming feedback. One area where customers may petition Microsoft for a change is technical support. Currently, customers are due to receive the same support under the midsize promotion as if they had purchased the products separately. For firms that supposedly have enterprise-level needs on shoestring-level budgets and severely constrained staffing capabilities, this may prove to be inadequate. Considering Microsoft's intent to expand its managed services offering, and its initial foray into this area with its recently announced OneCare plan, perhaps Microsoft will choose to marry a Midrange Windows Server bundle with a managed services offering for servers. Or, considering Microsoft's intent to forge into some areas previously left to partners, such as security management and business intelligence, it could leave this to partners.